Proposed 30% reduction in land rental fees for 2024

Based on feedback from ministries, sectors, and local authorities, the Ministry of Finance has consolidated, finalized, and issued the Draft Decree on the reduction of land rental fees for 2024 on December 5, 2024 (“Draft”).

Under the Draft, organizations, entities, enterprises, households, and individuals currently leasing land directly from the State under Decisions, Contracts, or Certificates of Land Use Rights, Ownership of Residential Housing, and Other Assets Attached to Land issued by competent state authorities in the form of annual land rental payments (“Land Lessees”) are eligible for a reduction in land rental fees for 2024. This provision also applies to cases where Land Lessees are not entitled to exemptions or reductions in land rental fees, have exhausted their exemption or reduction periods, or are currently receiving reductions in land rental fees under the provisions of the Land Law and other relevant laws.

To qualify for the reduction, Land Lessees must submit their applications to competent state authorities by no later than March 31, 2025.

The reduction amount is 30% of the land rental fees payable for 2024. Outstanding land rental fees from previous years (before 2024) and late payment penalties are not eligible for this reduction. In cases where Land Lessees are already receiving reductions in land rental fees under regulations and/or deductions for compensation and site clearance costs, the reduction mentioned above will be calculated on the amount of land rental fees payable (if any) after the applicable reductions and/or deductions as prescribed by law.

If Land Lessees have already paid land rental fees for 2024, and after competent authorities determine and approve the reduction, there is an overpayment, the excess amount will be deducted from the rental fees of subsequent payment periods or future years as per the provisions of tax management and other relevant laws. If there are no subsequent payment periods, the excess amount will be offset or refunded in accordance with the provisions of tax management and other relevant laws.

The proposed reduction in land rental fees under the Draft, if approved, will provide support to enterprises in the context of ongoing economic volatility and challenges in both Vietnam and globally. This initiative aims to reduce business costs, thereby supporting production and business operations.